Tobacco punitive verdict stands
on Mar 31, 2009 at 10:05 am
The Supreme Court chose on Tuesday, after examining the issue for the third time, not to disturb a punitive damages verdict now totaling more than $150 million, won by the widow of a heavy smoker who died of lung cancer. The Court dismissed a new appeal by Philip Morris USA, saying it had “improvidently granted” review last June. The case, heard on Dec. 3, was Philip Morris USA v. Williams (07-1216).
This was one of three actions the Court took to resolve the merits of pending cases. It decided unanimously that a criminal conviction need not always be overturned if a juror was wrongly seated after being opposed by a defense lawyer’s peremptory challenge. The Court declared, in Rivera v. Illinois (07-9995), that such an erroneous seating is not such a serious trial error that it cannot be excused as “harmless.” States are free to decide on their own what consequences follow such an error in assembling a juror, Justice Ruth Bader Ginsburg wrote for the Court.
In a second ruling, the Court unanimously restored the power of the state of Hawaii to sell off lands it acquired on becoming a state, in the case of Hawaii v. Office of Hawaiian Affairs (07-1372). The decision, written by Justice Samuel A. Alito, Jr., overturned a ruling by Hawaii’s Supreme Court that the state could not sell more than 1.2 million acres of its land until it resolved claims to the land by native Hawaiians. The decision was an interpretation of the 1993 federal law, marking the 100th anniversay of the U.S. government’s overthrow of the royal government of Hawaii. The law apologized for that affront, the Court noted, but did not create any private rights that override the state’s sovereign power to dispose of the lands handed over to it by the federal government when Hawaii achieved statehood in 1959. Any claims to the land by native Hawaiians are to be resolved under state law, Justice Alito wrote.
The Philip Morris case had become something of a judicial minuet between the Supreme Court and the Oregon Supreme Court, with the Justices twice telling the state tribunal — in 2003 and 2007 — to reconsider the punitive verdict that had been $79.5 million but, with interest accumulating, has perhaps doubled.
The state Supreme Court, in its latest decision in January of last year, once more upheld the verdict of favor of the widow, Mayola Williams. It did not need to consider the constitutional questions the Supreme Court had returned to it, the state court said, because it now found an adequate basis under state law for sustaining the verdict. That basis was a finding that Philip Morris had erred in seeking a jury instruction.
Philip Morris then returned to the Supreme Court, arguing that the state court had defied the Justices’ mandate in 2007 to reconsider the constitutional validity of the verdict. It argued that the state court could not use a newly minted procedural bar to reopen a punitive verdict after the Supreme Court had required it to apply a constitutional rule to judge the award. It also contended that and out-of-proportion award cannot be justified on the theory that the company’s conduct was so reprehensible as to override the constitutional right to have a proportional limit on such damages.
The Court, in granting review last June 9, agreed to hear only the first point — that is, whether the state court was wrong in invoking a procedural bar, for the first time, to sustain the jury’s award. That is the issue the Justices said on Tuesday they had erred in agreeing to decide it.  The Court issued no opinion beyond a one-sentence dismissal, issued “Per Curiam” (by the Court) rather than in the name of a Justice.
Mayola Williams’ husband, Jesse, died in March 1997 of cancer after years of smoking Marlboro cigarettes, one of Philip Morris’s brands. She sued, winning compensatory damages of $821,485.50 and punitive damages totaling $79.5 million. The compensatory award was reduced to $521,485 under an Oregon law capping damages for wrongful death.
The judge also reduced the punitive award to $32 million, but the Oregon Court of Appeals restored the full amount of that award. That decision led to Philip Morris’ first of three appeals to the Supreme Court.
Mrs. Williams’ lawyers told the Court this time: “Twelve years after the tragic death that gave rise to this action and nine years after the lengthy trial of this case, with four appellate reviews in Oregon, and five years after the first of three trips to this Court, it is time for this litigation marathon to end.”
The marathon, however, apparently is not over yet. Philip Morris, at an earlier stage in the case, reserved the right to challenge a state law that requires that 60 percent of a punitive verdict goes to the state of Oregon. The company’s argument against that is that Oregon has achieved all of the proceeds it is entitled to have under the global settlement of a group of states’ lawsuit against the industry.
Mrs. Williams’ lawyers, backed by the Oregon attorney general, have argued that the tobacco settlement only applied to that specific case, and thus would have no effect on the verdict in her case.
Philip Morris, in a statement Tuesday following the new decision, said it was pursuing this issue in a proceeding now in state court.
The verdict stood at nearly $143 million a year ago when Philip Morris filed its latest petition in the Supreme Court. Under Oregon law, the interest rises at 9 percent a year, indicating that the award is now worth something around $156 million. Mrs. Williams’ 40 percent share would thus appear to be somewhere above $60 million. (The compensatory award of $521,485.50 has not yet been paid, because Philip Morris’ various appeals sought a new trial on the entire verdict.)
